Households’ inflation expectation at over 10%: RBI survey

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Mumbai | Published: February 3, 2016 10:45:22 PM

Indian households expect inflation at over 10 per cent in the year ahead, twice as much as RBI's retail inflation target of 5 per cent by March 2017, according to a survey conducted by the Reserve Bank of India.

RBI on household inflationIndian households expect inflation at over 10 per cent in the year ahead, twice as much as RBI’s retail inflation target of 5 per cent by March 2017, according to a survey conducted by the Reserve Bank of India. (Reuters)

Indian households expect inflation at over 10 per cent in the year ahead, twice as much as RBI’s retail inflation target of 5 per cent by March 2017, according to a survey conducted by the Reserve Bank of India.

According to Reserve Bank’s ‘Inflation Expectations Survey of Households: December 2015′ results, which were out today, Indian households expect inflation at 10.5 per cent in the next one year and 10.3 per cent each for current and next three months.

These survey results act as useful information for RBI to decide on its monetary policy.

At its policy review yesterday, RBI kept repo rate unchanged at 6.75 per cent, awaiting inputs from the Budget on February 29 and further data on inflation.

In general, a majority of the respondents — 90 per cent — expect prices to increase over the next three months and a year ahead.

The survey covered inflation expectations of 4,828 urban households’ individual consumption basket across 16 cities.

RBI has been conducting Inflation Expectations Survey of Households since September 2005.

In a separate ‘Consumer Confidence Survey: December 2015′, RBI said the one-year outlook on economic conditions has been consistently better than a year ago.

The survey studies respondents’ perception on general economic conditions and their own financial situation.

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